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Rio Tinto announced the sale of their coal mines in Tete Province, Mozambique, by 50 MUSD to Indian Coal Ventures Pty Limited (ICVL). The agreement includes the Benga coal mine and other active projects in the Tete Province and does not include other Rio Tinto assets in the country.

Rio Tinto started their activities in Mozambique in 2011, acquiring Riversdale Mining assets for 3.7 bn USD. In this year’s first half (characterised by a strong fall in coal prices) the mines produced 733 thousand tons of coking and thermal coal. The coal project in Mozambique suffered heavy losses in 2012 – 2 bn € – and subsequent layoffs in 2013.

Rio Tinto is not completely divesting from Mozambique, as it will keep the Matumba mineral sands assets and a crane depot in the country.

ICVL is a joint-venture created by the Indian government with the task of acquiring coal assets abroad. ICVL includes some of the largest state-owned Indian companies: Steel Authority of India Limited, Coal India Limited, Rashtriya Ispat Nigam Limited, National Minerals Development Corporation Limited and National Thermal Power Corporation Limited. This transaction has given the ICVL the control of substantial coking and thermal coal resources, including a 65 per cent stake in the Benga mine and other assets (including exploration licences).

The transaction, due to be completed during this year’s third quarter, is pending regulatory authorisation.